Economic and Social Impact of COVID-19 Pandemic on Female Immigrant Entrepreneurship in Rome: Threat VS Opportunity

CHARACTERISTICS OF FEMALE MIGRANT ENTERPRISES IN THE LITERATURE

In its continuous evolution, the phenomenon of immigrant entrepreneurship has been the focus of numerous studies aimed at illustrating how and why immigrants have undertaken entrepreneurial initiatives, the factors of success and their characteristic elements.

Comparing the characteristics of migrant women entrepreneurs with general studies on female entrepreneurship, there are obviously many points of contact, but there is also distinctive evidence of the migration phenomenon in MFEs.

On average, migrant female enterprises, like female enterprises in general, are small, recently established and operate in the service sector. However, for example, the aspiration to independence as a motivation for entrepreneurship is much less dominant in ethnic women entrepreneurs than in general women entrepreneurs. In terms of the perceived obstacles to entrepreneurship, ethnic women entrepreneurs are affected by language difficulties and the lack of education in the country of establishment (Baycan-Levent 2010, p. 231).

Some other food for thought comes from the statistics on the level of education: on average, women entrepreneurs in Europe are better educated than male entrepreneurs. While the percentage of college graduates between men and women is similar, the percentage of female entrepreneurs with a more advanced education path is higher (Global Entrepreneurship Monitor Italy 2018, p. 19). Therefore, it seems legitimate to assume that the level of education of migrant women affects the entrepreneurial choice motivated by the search for opportunities to enhance professional skills.

In recent years, a number of studies have been trying to explore the contribution that women can give to a more equitable and efficient development pattern. According to some studies, women entrepreneurs are more socially responsible: they demonstrate a greater ability to pay attention to stakeholders, both internal and external to the company. 62 % of female businesses adopt at least 2 out of the 3 behaviors considered socially responsible such as attention to the welfare of employees, relationality with local stakeholders, and relationality with customers (Unioncamere 2019, pp. 4, 5). This socially responsible oriented behavior can be an element of competitiveness of migrant female businesses.

The results of numerous studies show that immigrant women entrepreneurs represent a potential source of economic growth: they grow faster than the businesses of native women or immigrant men, develop transnational activities and expand their economic ties not only to their countries of origin but also to other destinations, thereby fostering international trade.

Women entrepreneurs of immigrant background are not only creating jobs for themselves, they also stimulate job creation by hiring other employees, and often offer employment

opportunities to other migrants (Baycan-Levent 2010, p. 235).

Other studies have focused on assessing forms of contribution different from economic contributions made to host societies by immigrant women entrepreneurs. Significant involvement in various community organizations engaged in voluntary activities has emerged (Ambrosini 2017, p. 24).

The comparison with the existent literature on female migrant enterprises leads to the point that, however, the topic of socio-economic impact of women's enterprises has still not been explored in depth. An objective of the empirical research in this paper is to give a contribution to fill this lack by going deeper into the evaluation of the potential economic and social impact of enterprises managed by immigrant women and their resilience capacity to the COVID-19 crisis.

FEMALE MIGRANT ENTREPRENEURSHIP: THE ITALIAN AND ROMAN CONTEXTS

In this paragraph, a deductive analysis of the Italian and Roma contexts will be carried out. Starting from the evolutions in the Italian entrepreneurial landscape, we will gradually zoom in the Roman scenario, trying to carve out the picture of migrant businesses out of the general context. This framing will be propaedeutic to the understanding of the analysis of this given entrepreneurs’ share behaviour in the response and recovery phases of the COVID-19 pandemic. 2020’s pandemic struck the Italian entrepreneurial context quite a lot. In a country where the small and medium enterprises represent a skyrocketing percentage -among 70 % and 90 %, according to different definition criteria such as employees number, annual turnover, etc. - the impact of COVID-19 related restrictive measures has been a real economic threat which literally crippled many of them.

According to ISTAT¹ (Rapporto Competitività 2021), by the end of 2020 the 32,4 % of the enterprises considered undermined their possibility of survival in the first 2021’s semester; the main hazards, in this sense, were perceived to be: the decrease in the national demand and the illiquidity deriving from it. The size of the enterprise is a factor that seems to be intertwined quite tightly with its endemic fragility: in fact, 45 % of small enterprises (here considered as those with 3 to 49 employees) run a so called “structural risk”: if exposed to a violent exogenous crisis, their activity would be seriously endangered by the consequences deriving from the economic shock; almost 60 % of them declared to need a staff reduction as a coping strategy, against the 26 % of those having 50 or more employees. In terms of sectors, those mostly affected are: travel agencies and all the stakeholders of the tourism supply chain, the arts and entertainment industry and all the restaurants and food related businesses (ISTAT, 2021).

In general terms, some strategies emerged as the most commonly adopted by business owners. These are: digital transformation with a vertical focus on e-commerce strategies and the redefinition of the business model, especially of the products/services offered. Alongside, another strategy widely used by small enterprises has been the use of financial instruments such as bank lending. This one, nonetheless, appears to be a “buffer strategy” as the tendency seems to lead to a generalized deleveraging (ISTAT, 2021).

Zooming on the Roman context (figure below), we can witness a quite irregular fall (compared to the trend) in coincidence of the pandemic start. The steep flexion during 2021 shows quite emblematically the difficulties addressed by a huge share of businesses in the very first aftermath of the pandemic.

Figure 1

Active businesses in Rome between 2009 and 2021

Fonte: Camera di Commercio delle Marche

The parameters of such a fall seem modelled quite symmetrically to the national indicators examined at the start of the section. According to the “Indagine Congiunturale di CNA di Roma - Secondo Semestre 2020”, even though the second 2020 semester registered a slight improvement compared to the first one, there has still been a huge regression compared to 2019. Even in the circumscribed context of the italian capital, the 80 % of the businesses significantly reduced the annual turnover and one third of them had to cut the staff (Repubblica, 2021). The most soundly affected have been those in the 2-9 employees range and the most widely used strategies to mitigate the adverse economic trend resulted to be: digitalization (59 %), staff training (42 %), website creation and e-commerce enhancement (41 %) (CNA Roma, 2021).

Furtherly zooming on a specific sort of enterprises: migrant businesses, data show a massive increase in the last 10 years (+29,3 %). In this framework, in the 2019-2020 biennium, the number still kept on increasing (+2,3 %), holding on notwithstanding the sudden pandemic related slowdown. Clearly, data are still preliminar and deeper studies would be needed in order to double check the veracity of these assertions (Melis 2021).

An interesting study from Unioncamere (2020), analyzes the evolution of migrant businesses in the Latium region in the first 2020 semester, when the biggest general lockdown took place in Italy. Even though 1751 migrant businesses shut down in those months, still 2775 new ones opened, with a positive balance of more than 1000. In Rome, the growth rate of this category still kept a positive value with +1,2 % in the semester (Unioncamere, 2020).

QUALITATIVE ANALYSIS OF SOCIO-ECONOMIC CONTRIBUTIONS

Some of the business women who participated in the quantitative research phase own enterprises with high socio-economic impact, entrepreneurial success stories and of innovation practices adoption. These entrepreneurs were invited to participate in the qualitative phase, the in-depth interview, with the purpose of investigating the key elements of success, the socio-economic contribution made to the various communities, the socio-economic effects of the pandemic, innovations and, possibly, best practices.

Qualitative analysis case study. Case Study ID: U5

One of the most interesting cases is that of a young Ukrainian businesswoman, living in Italy for seven years. She is the owner of a tailor’s shop in Ukraine and has used her past experiences by starting up a tailor's shop in Italy together with her husband. In our research of 2019, the business was classified as an innovative FME. During the interview she confirmed that her business was affected by the impacts of Covid-19, but she put in place a number of

interventions which helped her to expand the business.

In details:

- Supply of new services and production of new goods:

"At the beginning of the pandemic we started the production of masks in order to secure a stable income for our business as we figured out that the market demand was very high. Later we decided to provide new services and began to work with leather, fur, custom embroidery and upholstery. To our surprise, our income today is even greater than before the emergency”.

So, at a first moment, the entrepreneur adapted her business to the emergency, then she was able to recognize new tendences and opportunities.

- New positioning strategies:

“During the pandemic, we decided to position ourselves not just as tailors, but also as specialized stylists...so today we reach a wide target of customers".

The company has redefined its business, raising the target market segment.

- Increased presence on "social" media:

"We increased our social presence to reach new customers and retain present customers...we opened Instagram and Facebook accounts and invited our customers to join. It worked and it wasn't so difficult. Thanks to digital technologies, we have improved the relationships with our customers."

The use of new ICTs accompanied and strengthened the launch of new products and the new

positioning strategies.

- Strengthening of social relations within the migrant community:

"We are collaborating with the Ukrainian Church present in Rome to represent our nation in cultural festivals. This year we will be part of the Ukrainian delegation to the “Festa dei Popoli” as stylists, presenting traditional Ukrainian clothes, and also as singers presenting folk dances and songs. For us it is an opportunity to promote the culture and the identity of the Ukrainian people”.

So, the linkages with the migrant community were perceived as a source of resilience.

- Expansion strategies:

"We thought the only way out of the crisis was to diversify the business. Then, as the quantity

of our services increased, we decided to open another business."

Qualitative analysis case study. Case Study ID: U6

There are also several cases where the strategies adopted to face the pandemic crisis were non-enough. In fact, we interviewed a woman entrepreneur, owner of four B&Bs who, despite a new rent approach, did not get to maintain a satisfactory turnover.

"We adopted some resilience strategies: we tried to reach a different target of customers allowing long stays up to one year. Unfortunately, that did not bring any effect. Two locations out of six have been definitely closed (...). I feel disarmed, I can't wait to get back to normal. The tourism sector has suffered a lot because of this emergency. The whole system has had to stop. It's not easy to adopt any strategies when the whole tourism industry is blocked."

In this case, it is possible that the specific factors of migrant entrepreneurs did not help to cope with the crisis and may have been an additional hindering factor. The foreign tourist market was blocked and the strategy of reorienting the business towards long-term visitors failed.

Qualitative analysis case study. Case Study ID: P6

The Case Study P6 deals with a female immigrant entrepreneur who moved to Italy a few years before 2000. She originally created an Ltd which later on converted into an individual firm in the central/eastern quadrant of the city. She runs a services firm, where people can go for paperwork handling and management. In our previous research, she was classified as a

successful entrepreneur in a traditional sector.

For her, during the general 2020 lockdown in Italy (March 9th to May 18th) there has not been a business volume reduction but only an organizational change: she was forced to physically shut down the office but, due to the nature of the service offered, she could convert it through new communication channels such as whatsapp, emails or even “delivery service”.

Both the nature of the administrative service and the creativity of the entrepreneur made such a virtuous adaptation possible.

Looking at the future, she said that this experience was important to make her understand that she needs to invest in technology: from a website reformation (it needs to be thinner and easier for the customer) to experts consultancy, she feels that this is a side of the business that just can’t be neglected or underrated anymore. The pandemic experience created new rooms

for investments in ICT. She said:

“The next step I want to do is for sure the digitalization of my business: I would like every client to have the possibility of opening a digital folder ad hoc for himself”.

In this perspective, she recently activated the web localization of her activity, which already gave some good results.

Financially, she had to ask for a rent payment delay for the first month and then a favorable government funding with low interests, which she already started to pay back. It was not difficult to do for her, the only difficulty was with the timing, because the money arrived after the hardest months hit. So, she was actually able to program her financial needs and access

relief measures provided by the Italian Government.

Qualitative analysis case study. Case Study ID: P27

This case study, P27, told us that her lockdown experience was, on the one hand an opportunity to have some recollection time with her family, on the other hand though, it has been a severe shock for her business. She has been running a small tailor’s shop in a central neighbourhood of the city for around 20 years and before the lockdown started she used to employ 4 migrant workers. In our 2019 research, this business was profiled as an experienced traditional enterprise. After the restrictive measures hit, she had to cut her staff, keeping only one full time employee plus a part time one. About this she said:

“I had to choose, you know how I usually am pro-women, but I had to keep Moussa (a

gambian male worker), he is my most competent and kindest employee.”

So, the western african male traditional competence in tailoring was a source of resilience for that business from the supply side.

She kept on saying:

“Luckily we had the possibility to breathe a little bit (financially speaking) thanks to the new need in the market: face masks. In those weeks in which face masks seemed impossible to find, I have been asked to produce a lot of them and people were ready to overpay for them. So I kept on working with my shop door shut. I was getting orders and secretly producing them inside the shop, without opening to the public… Later on, in September and October the city started to shut down again and I contracted Covid too, so the workflow suddenly stopped and since when I got back it didn’t really return to pre-pandemic levels“.

In terms of strategies, she didn’t really implement any. What she did can be mainly considered as an emergency reaction. She says that this crisis made her think about the need to digitally convert her business as much as possible through a website and social media, nonetheless she does not really define herself as a technologic person and this is what is holding her from starting this process; the only thing she embarked on in this perspective is the logo design, which should be ready soon.

Financially, she had to resort to layoff for two employees and she got government’s aid that she defines as “derisory”; moreover, she managed to get her rent price lowered from the

property owner. Nonetheless, she told us:

“I could have asked for some easy money lending from the government, but I don’t want to be in debt anymore, also because this crisis won’t be over in a year or two. I want to go on with my own resources. Luckily, I have some savings aside and in this troubled period I could use them. I believe that I still haven't adopted any strategy, I am observing the situation and preparing the business to sell online and to undergo a digital transition”.

Such a wait-and-see strategy was only possible thanks to her forward-looking attitude which enabled her to accumulate savings during her long stay in Italy.

PROFILES OF MIGRANT FEMALE ENTREPRENEURS BUILT ACCORDING TO THE IMPACT AND THE REACTION TO THE COVID-19 PANDEMIC

As we have learnt from the case studies examined in this paper, the pandemic surely had a considerable impact on the businesses performances and led the entrepreneurs to adopt, or at least to consider, new strategies to mitigate the effects of such a sudden change in global

society.

Depending on a number of factors such as sector, economic “health” of the business before the pandemic, exposure to anti-pandemic restrictive measures, financial stability, resilience and recovery strategies adopted, last year’s business evolution varied quite a lot case by case.

As shown in the figure 2 below, we delineated four entrepreneurial profiles, according to the resilience capacity in response to the pandemic:

• Resilient "passive" female businesses: migrant female entrepreneurs who have not adopted any resilience strategy because their enterprises have not been affected by the crisis COVID). Case study: P27.
• Female enterprises "active" in expansion: migrant female entrepreneurs who have adopted some resilience strategies and have been able to maintain business regimes similar or greater than pre-emergence. Case study: P6, U5.
• Female enterprises "active" in crisis: migrant female entrepreneurs who have adopted some resilience strategies but have not been able to maintain business regimes similar to pre-emergency ones. Case study: U6.
• Female enterprises "passive" in crisis: migrant female entrepreneurs who have been

affected by the COVID crisis, but have not adopted any resilience strategies.

Figure 2

Profiles of migrant female entrepreneurs built according to the impact and the reaction to the COVID-19 pandemic

Source: Elaboration of the authors.

The following image shows how the enterprises that we have interviewed fit in the profile table. Apart from the P27 case study, the other entrepreneurs all adopted some resilience strategy, and two out of three got a considerable improvement.

Figure 3

Migrant women entrepreneurs groups and cases, based on strategies adoption and resilience capacity in response to COVID-19 pandemic.

Source: Elaboration of the authors.

CONCLUSIONS

Retrieving the results emerged from the 2019’s research cluster analysis, we had the chance to outline 4 different entrepreneurial patterns: first generation entrepreneurs, who decided to open a business in sectors more accessible to foreigners, such as food industry or commerce, usually directed to a general public; female innovator entrepreneurs, focused on high skills and quality, even at the expense of immediate earnings, but also achieving greater stability in employment; traditional successful entrepreneurs, managing to offer typical products or services, made by employing foreign workers, but still addressed to generalist customer base; new generation of well-integrated entrepreneurs, with a greater employment growth, knowing how to enhance the skills gained in the country of origin and able to make a competitive advantage out of their cultural openness.

The archetypes (described in Fig.2) deriving from this year’s in-depth qualitative interviews and taking into exam the resilience capacity and the strategies actively adopted, seem to match quite consistently to at least 3 out of the four “old” patterns described.

Namely, the cases P6 and U5, belonging in the matrix (Figure 3.) to the category “Female enterprises active in expansion”, show deep differences among them, but they both share the proactive approach. In fact, even though in the cluster analysis the case P6 belongs to the “traditional successful entrepreneurs” pattern and the U5 to the “female innovator entrepreneurs” one, they share the attitude of taking the pandemic as an opportunity to innovate their business and adapt it to an evolving society, especially through digitalization strategies. Of course, such an attitude is “justified” also by the pandemic impact magnitude: their business carry out activities - tailor’s shop and bureaucratic services - which were not (or just partially) affected by the restrictive measures. Differently, the other tailor’s shop described (case P27), which belonged to the “first generation entrepreneurs”, demonstrated to still be resilient but did not actively adopt any strategy to adapt her business: she relied on the savings accumulated throughout the years and reduced her staff in order to keep up her enterprise.

A different matter is the case U6: even though she had been included in the “female innovator entrepreneurs” cluster and stated that she tried to adopt many different strategies to cope with the pandemic-related crisis, her resilience capacity was not enough to mitigate the massive impact of the economic shock on a sector as exposed as the tourism industry.

What emerges from this follow-up aimed at assessing the impact of the pandemic over an acquainted sample is that there is probably a line, embodied by the violence of the restrictive measures on some specific sectors, beyond which the entrepreneur will face severe difficulties no matter which strategy decide to adopt. On the other hand, deliberate choices can actually turn out to be game changing as we witnessed comparing the two tailor’s shop cases: even though the sector and the type of shop is the same, the choice to undertake (or not) some

strategies gave different results.

It is still unclear how the entrepreneurial component of our society will evolve in the next future. What seems to come out from these qualitative data though, is that a proactive strategic attitude is tendentially more likely to give results rather than a passive one which, even if sided by a high degree of resilience, usually can just minimize the damage. The results of our research show that several FMEs in Rome were able to develop resilience strategies

based on their creativity, professional expertise, digitisation and community relations.

NOTAS

1. National Italian Statistic Institute

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